Merrion – Irish economic focus

Merrion Private

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Economics: Irish external trade balance likely to have fallen back in February from January’s record-high

The Irish economic focus on Tuesday turns to the external trade balance for February. There was a record seasonally-adjusted surplus of €5,745m in January, which was €1,948m higher than the revised surplus of €3,797m (€4,018m) posted in the final month of 2016. Seasonally-adjusted exports were up 7.0% in the month at €10,838m while imports recorded a big decrease of 19.6% to €5,093m.

Meanwhile, on an unadjusted basis there was a surplus of €4,759m in January, €1,029m above the surplus of €3,730m posted in the opening month of 2016. For 2016 as a whole, the surplus was revised down to €46,430m from €47,312m, but still a record-high and €4,134m greater than the previous record surplus of €42,296m in 2015. Unadjusted exports totalled €9,963m in January, representing an increase of €1,202m (+13.7%) on the first month of 2016.

The largest rise in exports in January was of Chemicals and related products which rose by €725m (+14.2%) to €5,847m compared with the opening month of 2016. This was followed by exports of Machinery and transport equipment which rose by €180m (+14.4%) to €1,433m.

One can only speculate as to how “Brexit” will impact Ireland in the coming months and years, but there is likely to be a negative impact on trade.The trade outlook for 2017 and beyond remains clouded in uncertainty, but we are still anticipating another solid performance this year. Indeed, based on the very positive start to the year, another record surplus now looks on the cards of around €47-48bn. A trade surplus of €4,500m is projected for February.